"An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative"
-Quote from 'Security Analysis'

>>1274555
>investing
>>1274559
What I'm trying to say is that if you aren't doing research you are speculating.

Read "The Intelligent Investor" by Benjamin Graham it is a good book.

>>1274555
>What research do you do before investing in something? ... do you deeply study the financials?

of course, however not every stock can be valued equally, some investments like in growth stocks are more speculative than others.

looking through financials is something you can learn in an hour and just grasp it in 20 minutes.

I just started a couple days ago but I just look at what the 52 week has was and if it's at the low I buy

>>1274571
being able to break down financials how important is that? in terms of the whole process of deciding to invest in a company?

>>1274575
Ok, yeah this is stupid but it works. You have to look at other long term factors, but this is usually the first thing I look at. Then P/E ratio, then news surrounding company, then look at it compared to sector and DOW Jones and S&P 500, then I take a small look at management, especially if it's a large investment. Also, I read the full 10k or 10q if it's going to be a large investment.

>never bought a stock because I don't know enough about it
>don't know enough about it because never bought a stock

How do you know when you're ready?

>>1274577
>being able to break down financials how important is that? in terms of the whole process of deciding to invest in a company?

Well I'll give you an example with an investment I did in summer 2015, now it is 100% up since then. (although I expected 40% tops, it overperformed even my own expectations)

There was a market I believed would be interesting and developing in the next 5 years. Researching the market I had 5 companies that were dominating it and practically set the price of the commodity they were selling. From the 5 companies that I put on the watchlist, 2 sparked my interest because of the financials and the information available I had on them (twitter, linkedin, ceo.ca).

Now the financials sparked an interest in one of the companies, because they were generating profit, however due to reinvestment into the marketbranch (I read they were reconsolidating that branch on yahoo.finance) I was interested in, the cashflow stayed lower than in the previous years. The stock was however somewhat overvalued than what the DFS would indicate (a factor you get by calculating discount cashflow, you can calculate it yourself however these numbers are avaliable in a number of stock screeners). I set my price at around the DFS value and waited that it comes near that.

August 2015, China started selling their USA shares to refinance, the company shares I was watching started falling, (all companies were falling). People panicked and started selling, the price came to the DFS value, I let the market test the support, and hit it at the next drop to support. I knew the company, I knew that there was nothing wrong with it, and that it will generate profit as it used to, I just got it at a bargain. In about one week the market stabilised. Now in summer 2016 after almost a year the SP priced peaked historically because the market I've been researching developed as predicted. (not predicted by me, but predicted by others, however I knew which information to process)

>>1274886
>what the DFS would indicate
*DCF of course

>>1274862
When you can lose what you initially invest and be able to pay rent.